Entertainment Gaming Asia net loss narrows in 2014
Entertainment Gaming Asia Inc (EGT), a distributor of gaming chips and related products in the Asia-Pacific region, reported a net loss of US$1.5 million for the final quarter of 2014, down from US$4.2 million a year earlier.
The Nasdaq-listed company on Tuesday reported revenue of US$8.3 million for the three months ended December 31, an increase of 63 percent compared to the fourth quarter of 2013. The growth in revenue was attributed to higher gaming products sales, but partially offset by lower gaming operations revenue, the firm said.
EGT operates slot machines on a participation basis and manufactures and distributes gaming chips, gaming plaques and related products to casinos in Asia and Australia under the Dolphin brand.
The company became a subsidiary of Hong Kong-listed Melco International Development Ltd late last year, following a share sale in November. Melco International, chaired by Lawrence Ho Yau Lung, is one of the two controlling shareholders of casino operator Melco Crown Entertainment Ltd.
On Tuesday, EGT said revenue from gaming products increased to US$4.2 million in the fourth quarter of 2014 compared to US$729,000 in the prior-year period. But revenue from gaming operations fell by 7 percent year-on-year to US$4.1 million in the period, “due to declines in both the Cambodia and Philippines operations,” EGT said.
For full-year 2014, the company reported revenue of US$22.4 million, up by 4 percent from the previous year. Revenue from gaming operations dropped by 9 percent year-on-year to US$16.4 million, while the sale of gaming products generated revenue of US$6.0 million, up by 76.5 percent from 2013.
The company reported a net loss of US$2.8 million for 2014, an improvement on the US$7.3-million loss in the previous year.
Last year’s results benefitted from the delivery of two orders for gaming chips and plaques in the Philippines in the fourth quarter; totalling US$4.0 million. It included an initial order for a new casino opening and a re-order from an existing casino customer, EGT said.
Melco Crown, which runs casinos in Macau and the Philippines, in December announced a three-year deal to purchase gaming products from EGT for a total consideration of US$29 million.
Clarence Chung Yuk Man, chairman and chief executive of EGT, said on a conference call with analysts on Tuesday that Melco International’s investment improved EGT’s capital and gave the company a better perspective for long-term growth.
“As a Melco company, we can leverage on relationships and expertise of Melco and its subsidiaries,” said Mr Chung, adding that EGT has now “broader access to potential growth opportunities and capital”.
Mr Chung also said EGT is negotiating “to secure a larger order for a new casino opening in Macau later this year”. He did not name the casino.
Mr Chung is also chairman and president of Melco Crown (Philippines) Resorts Corp, the operator of City of Dreams Manila, according to filings and press releases by that company.
Melco Crown held the official opening of City of Dreams Manila on February 2. The casino operator is aiming to open its majority-owned Studio City scheme in Macau in the third quarter this year.
EGT on Monday announced it was expanding the board of directors with the appointment of Dennis Chi Wai Tam as a member.
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